Adux

I find it stupid that anyone will believe, that the Russian Government and Russian Oligarch's see money only in Oil and Gas.

Firral

Yes, certainly.
This rather widespread false statement, together with the thesis " the Russian economy grows ONLY owing to the high prices for oil ", they can be heard often in the western mass-media.
On one of branches of this site someone already compared rates of growth of economy of Russia and Saudi Arabia for last 10 years. Saudi Arabia too a big exporter of oil, however owing to the high prices for oil its economy has not received such growth as in Russia. Hence, at economic growth of Russia there are also other factors, whether not so?

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Adux

Firral,

Unlike Saudi Arabia, Russia is not a Technologically backward country, on the contrary it is in the forefront of technology, Oil and Gas maybe been the most important part of the Russian Economy in the last decade, but it is not going to be in the future, and Russians have a history to prove it.

Feanor

I'm not in favor of an economy out of control. I'm in favor of a centralized and well planned economy. What I'm not in favor is a strong-armed government intent on ignoring it's own laws and dedicated to the preservation of power of said financial structures, often times at the expense of it's own people. Giving the current Russian government economic power, eliminating the more or less independent financial structures, and forcing money into state-run projects is actually not a bad idea. It just requires higher protective tariffs. However with the current Russian government being what it is, an oligarchy representing financial interests dominated by a small group of strong-men (силовики), we have a recipe for a dictatorship.

Adux

Feanor,

Socialism doesnt work

Adu

foxhound_nn

Adux, you are saying with such a patriotic rhetoric that I believe that you are Russian))

Feanor, не силовики контролируют наши основные финансовые группы, неужели по-твоему Чубайс, Потанин, Дерипаска и Абрамович силовики? Но вообще олигархия сейчас в России переживает хреновые времена, власть хоть и не контролирует их напрямую, но держит на привязи. Короче, олигархи и силовики - разные люди, и слава богу, что силовики контролируют олигархов

Parihaka

foxhound_nn, in English please

Alex_Ivanov

Controlled and planned economy are 'two big differencies' as they say in Odessa. First does work and the second does not.

In fact our government pays much attention to its own laws and hasn't violated any single letter yet.

True.

No way! On the wave of centralization and economic consolidation we need free trade more than protectionism. We need to enter WTO, for example, because free competition on the open market is the only way to improve quality and efficiency of our economy. Otherwise we'll stay giant oil-pump forever.

Foxhound replied already. Siloviks just ensure oligarchs understand economic policy of the state correctly. Economic dictatorship is enevitable evil at this stage of our development.

Feanor

There is a great book by Паршев called ''Почему Россия не Америка''. I'm inclined to agree with his main thesis. Integration into the world market is suicide for Russia. On a most basic level, a factory built in Russia, with all other variables equal, will always be more expensive then one built in China. It would have to have a deeper foundation (below the freezing level), thicker walls and windows, and a pretty high heating bill. When you work all of that into the price tag, there is no reason to build industrial enterprises in Russia. Infact there is no reason to build anything in Russia. On a most basic level Russia is inefficient due to local conditions, and the only way to offset that is by simply closing off the internal market and allowing indigenous industry to develop based on internal competition for the domestic market.

Alex_Ivanov

There's no better way to commit suicide than to isolate your economy. USSR anyone?

The picture is way too simplistic, on the level of school essay. First, it is correct only if we're going to produce the very same goods and services as China. Our goal is to produce something China isn't able to produce and to develop technologies. Just don't say Russia can't do that.

Second, Russia is doomed to have huge state-owned sector of economy due to reasons you describe, but that doesn't means we don't need free market. Absense of free market is death of every economy.

Then let's continue your list of 'naturally inefficient' economies: Canada, Finland, Iceland, man, we can add to this list the whole Europe and North America, (if not the whole world except southwest asia), because it's always cheaper to build factories in China/Taiwan/Malaysia/Indonesia than in any European/N.A. country, isn't it?

Feanor

Or perhaps that the military spendings needed to be lowered to a reasonable level, and the army cut down in size? Parallel this with a management overhaul, and you had a quite stable system that could provide Russia with everything.

Absence of a free market? Define free market (for the purposes of our conversation) please.

Have you read the book? I don't want to be reciting chapters here. Also consider that Southern Norway is warmer then Moscow, and palm trees grow in London. In Europe temperature gets colder the further east you go. And finally notice how European economy has switched into effectively a world-exploiting system that doesn't actually produce anything?

Alex_Ivanov

Lowering military spending does not change a little. If USSR spent less on military, it could supply citizens with twice as much terrible-quality goods we enjoyed (though you may not remember it). Who the hell needs that? Isolated market economy (with competition only on internal market) is a bit better than soviet isolated planned economy, but remember - the more competition you face, the faster you develop. By cutting foreign competitors out, you slow down your development, so sooner or later your country turns out to be inferior.

Every market can be placed on the scale - from full protectionism, when all foreign goods that have domestic equivalents are not allowed to enter the market - to absolutely free trade, when only buyer decides what goods he buys. In reality most countries are somewhere in the middle of the scale, so we have to talk about more protective / more free markets. Russia does not need more protectionism than she has, and in all probability needs less.

Thanks God! If the whole book is about points you made, it's not worth reading, because author is whether unfamiliar with subject we writes on, or just has some agenda we're unaware of.

Please note also, that Petropavlovsk-Kamchatskiy is southern city compared to Moscow and today, in december there's +1 C outside. It's not the point. It's more profitable to built factory in China than in London or southern Norway anyway. Want to argue?

Europe doesn't exploit the rest of the world. Taking aside their own production, Europe, US and other coutries invent things other countries produce. Yes, some countries can produce goods cheaper, but, for example, outstanding China's production capability means nothing without western knowledge and technology. That's how modern world's economy works, it's called 'division of labour'. Russia still has to find her place in global economy, and closing ourselves inside our borders isnt' a way to follow.

Feanor

The quality of many Soviet goods was not nearly as bad as is commonly thought. In any event you're failing to realize that Russia can not develop and independent manufacturing-based economy due to incredibly high production costs, and can not develop a resource-based economy because realistically we're going to run out of resources in the forseeable future, and Siberian resources are simply too expensive.



The author does a fairly good job of analyzing the Russian economy, in comparison to other economies of both first and third world countries, on the factors of efficiency. It was an interesting read, at least for me.

I was just pointing out that your general comparison of Russia to other colder parts of Europe wasn't very accurate. In Russia winter presents much more o a problem, both with heating, and maintenance. This is not only for industry, but just for regular housing. In California they build houses out of saw dust, glue, and paint. In Voronezh, which isn't very far North, it's triple-layered brick.

Europe invents, but most of Europe works in an inflated service sector, whose paycheck is kept high by the exploitation of the third world. It's Marx all over again, except on a global scale.

Firral

You have outstripped me , having cited as an example this very interesting book. I consider that it should be the textbook to the Russian economists and politicians. Unfortunately it is not widely widespread.
I advise it to read through Alex_Ivanov and another.

Alex_Ivanov

Really? Do you remember any?

By the way, I can not see what do you offer, as always. Actually, two ways you show aren't the only two.


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I feel I should read it just not to be soviet activist who "haven't read Solzhnitsyn's books, but condemn them" But I still wonder what do author offers. Giving up is not an option.


I didn't compare Europe to Russia. I compared them both to China and other asian countries.

Knowledge is also a commodity. Purely industrial economy is a day-before-yesterday. That's why Marx is still being studied in universities, but only in 'history of economic teachings' section.